Thinking About Investing in Capital Equipment? What You Should Know About Section 179 and Why You Should Invest Before Year-End

November 2, 2021  |  By Elise Hamann

What You Should Know About Section 179

If you’re not familiar with Section 179 and the financial upside it presents for equipment purchases, let us help!

As we near the end of 2021 and look to 2022, now’s a great time to explore how this Section 179 can help you help your patients and grow your practice. We’ve outlined some key points all medical professionals should know about Section 179: what it is, who it applies to, how the tax code has changed in recent years and why there’s no time like the present to take advantage of the tax savings.

 

What Is Section 179? 

Section 179 of the IRS tax code is a government incentive to encourage businesses to invest in themselves by purchasing new equipment or technology. For medical professionals , it means you can deduct the FULL purchase price of qualifying equipment that is bought or financed during the tax year from your gross income.

 

How has the tax code changed?

Section 179 has been around for years, but its tax advantages expanded and increased in 2018. With a higher limit of $1,050,000 and bonus depreciation doubled to 100%, 2021 continues to be a favorable tax year to upgrade, expand and improve your business with a new equipment purchase.

 

What is the timeline for 2020? 

If you acquire your equipment and put it into use before December 31, 2021, you qualify for this tax deduction. 

 

How much can I deduct for the 2020 tax year? 

If you are the legal owner of the equipment for tax purposes, you may be able to deduct the full cost of any equipment you acquire and put into use in 2021 — up to $1,050,000.00. There’s a $2,620,000.00 cap for equipment purchases per business. (And if you exceed the $2,620,000.00 spending limit, bonus depreciation of 100% may apply.) 

 

Can I finance medical equipment and still take the deduction?

YES, and it’s often a great option. Capital Leases and Equipment Finance Agreements qualify for the Section 179 deduction. This means it’s an ideal time to invest in technology from CuraMedix.

NOTE: Your finance payments may be less than the deduction amount, which potentially creates a profit when you finance the purchase!

 

Why should I utilize the Section 179 Tax Code? 

Using the Section 179 deduction may lower your tax payment to the government and free up cash for other business needs. By taking advantage of this tax deduction, you are potentially keeping more of YOUR money in YOUR pocket. You can potentially create savings that make your equipment purchase price substantially less. 

 

Does Section 179 Tax Deduction apply to me? 

The provisions of Internal Revenue Code Section 179 allow a sole proprietor, partnership, or corporation to expense tangible property in the year fully it is put into use. What you need to know about IRS Section 179

 

Can you provide an example of the tax deduction?

Equipment Cost:

Medical Device: $50,000

Deduction: $50,000

Tax savings: (assuming 32% tax bracket) $17,500


Cost of Equipment After Tax Savings: $32,500

 

Are there any caveats for physicians? 

Just like with any tax deduction, you’ll need to spend money to save money. Section 179 is not reason alone to make a capital purchase. However, for physicians who are focused on improving patient outcomes by investing in the latest technologies and innovations, Section 179 gives you an added reason to reach those goals before the end of 2021. 

Because every physician and practice is different, it’s always a good idea to speak with your tax advisor for more information and tax-related advice. Interested in learning more about EPAT/ESWT devices and integrating this innovative technology into your practice for improved patient outcomes? Contact us at any time.

shock wave

About CuraMedix

CuraMedix, the leading U.S. distributor of STORZ Medical devices, provides its partners with exceptional customer service, marketing guidance and technical support. The CuraMedix portfolio of products includes the radial pressure wave and focused shock wave devices and now MAGNETTOLITH, an EMTT device.

Topics: Practice Improvement, Industry News